1. Forensic Accounting/Forensic Auditing is the specialty practice area that describes engagements which result from actual or anticipated frauds, disputes or litigations. Forensic Accounting /Forensic Auditing, Fraud Detection & Prevention specialization is in increasing demand considering increasing incidents of cyber-crimes and frauds. It is the practice of utilizing accounting, auditing, CAATs/ Data Mining Tools, and investigative skills to detect frauds/ mistakes. The Government bodies, PSE’s, Insurance sector, Banks, Investigating agencies as well as many medium-sized and boutique firms have specialist forensic accounting/forensic auditing departments engaging Forensic Accountants/Forensic Auditors (FAs).
2. According to ‘2018 Report to the nation’ by Association of Certified Fraud Examiner (ACFE), there were 2690 cases of occupational fraud from 125 countries resulting into loss of more than $7 billion which cause a huge demand for those who can identify and put up relevant control to prevent such mishap. Out of these 72 cases were from Pakistan and India. Against a backdrop of tough economic conditions and growing corporate governance, demand for Forensic Accountants/Forensic Auditors (FAs) is increasing. Practitioners believe that the demand for the services of Forensic Accountants/Forensic Auditors (FAs) is growing because of the tightening economic conditions and the increasing scrutiny of how companies are governed. In such circumstances, there is heightened sensitivity to fraud, and that translates into more efforts to detect and prevent it, as well as to take legal action against the wrongdoers.
3. The growing number of regulator and the administrative agencies will demand the services in the nature of forensic accounting and forensic auditing practice. Forensic Accountants/Forensic Auditors (FAs) are going to find themselves more involved in what is essentially a type of forensic practice. The changing nature of the Accounting and Auditing & assurance standards also confirms this. Nearly 40 per cent of the top 100 American accounting firms are expanding their forensics and fraud services, according to Accounting Today.
4. Forensic accounting refers to a strategic approach whereby financial data and non-financial information are gathered, monitored, studied and analyzed for fraud-prevention purposes. While the standard accountant focuses on balancing books and maintaining records, the Forensic Accountant/Forensic Auditor (FA) intensively investigates financial activity for evidence of misconduct. Business accounts can be extraordinarily complex, making it difficult or even impossible for problems to be detected without thorough investigation. To overlook or ignore
evidence of monetary misgivings can lead to devastating legal and financial consequences. It is the job of the Forensic Accountant/Forensic Auditor (FA) to look for, prevent and pre-empt
fraudulent activity, for the protection of the respective business or organization.
5. The digital era has made it easier than ever before for criminals to tamper with business accounts and generally defraud others. Of the 500,000+ new businesses that are established every year, the overwhelming majority rely on computers and the internet. Each time security experts intensify their efforts to minimize external risks, hackers push back with equal force. Research has also shown that internal ‘white collar’ crime is also a growing problem, contributing to more than $1 trillion in combined losses every year. The contemporary fraudster
has a tendency to be highly capable in covering their tracks and leaving little to no evidence behind. Conventional accountants and business managers alike simply do not have the knowledge, the specialist skills or the available time to carry out comprehensive financial audits and investigations.
6. By taking a proactive approach to accountancy, a business is able to safeguard itself from both devastating losses and dire legal consequences. Forensic Accountants/Forensic Auditors (FAs) investigate financial activities and records in comprehensive detail, searching for any evidence whatsoever of fraudulent or unusual activity. Where detected, the required evidence is gathered, collated and ultimately presented in a clear and concise manner–often in a court setting.
7. Forensic Accounting/Forensic Auditing is a highly-specialist field of growing relevance and value to the global business community. Experience builds professional expertise, but there is
also a great deal of theory to master before stepping into a working accountancy role. Studying Forensic Accounting/Forensic Auditing at-length and in-depth is crucial for anyone interested in joining this dynamic and rewarding profession. By exploring the investigative process, the psychology of the modern fraudster and how to effectively build a case, you prime yourself for the next crucial step up the career ladder.
8. Forensic Accountants/Forensic Auditors (FAs) can be used for investigating many different crimes related to financial fraud, such as sales fraud, inventory fraud, marketing fraud and securities fraud. They are commonly used for help in investigating financial fraud committed by employees, clients or customers. Litigation support services are also provided to legal
professionals as evidence to support or refute claims as needed.
9. We live in a new world that deals with the issues of financial collapses, economic downturns, growing occurrences of fraud, a litigious society and an expectation of quick results from peers, clients–and even friends and family. Attorneys have benefited from the business that this new world has generated, as well as the increase in government and regulatory scrutiny.
10. Attorneys know that there is a value proposition to be presented to a client when working in tandem with a Forensic Accountant/Forensic Auditor (FA). Together, the attorney and forensic accountant can coordinate research needs and interpret the details uncovered. The combination of attorney and Forensic Accountant/Forensic Auditor (FA) will help analyze complicated financial data, and will persuasively and effectively communicate results with a high degree of credibility. A maximum amount of team work is necessary for the just and proper results for the client whether it is in the advisory area, in a pre-litigation or a litigation scenario. Litigation often involves multiple, complex accounting and legal issues that overlap and intertwine. So, in this overly convoluted world, a client can maximize benefits, and minimize downsides, by retaining both an attorney and Forensic Accountant/Forensic Auditor (FA).
11. An in-depth knowledge of financial statements and the ability to critically analyze them. These skills help FA’s to uncover abnormal patterns in accounting information and recognize their source. A thorough understanding of fraud schemes, including but not limited to asset misappropriations, money laundering, bribery, and corruption. The ability to comprehend the internal control systems of corporations, and to set up a control system that assesses risks, achieves management objectives, inform employees of their control responsibilities, and monitors the quality of the program so that corrections and changes can be made.
12. Proficiency in computer and knowledge of network systems. These skills help FA’s to conduct investigations in the area of e-banking and computerized accounting systems. Knowledge of psychology in order to understand the impulses behind criminal behavior and to set up fraud prevention programs that motivate and encourage employees. Interpersonal and communication skills, which aid in disseminating information about the company’s ethical policies and help FA’s to conduct interviews and obtain crucially needed information. Thorough knowledge of company’s governance policies and the laws that regulate these policies and Command of criminal and civil law, as well as, of the legal system and court procedures.